http://www.nytimes.com/2014/04/03/us/politics/ruling-returns-power-to-big-donors-and-party-leaders.html

APRIL 2, 2014

Power Surge for Donors as Terrain Is Reshaped on Campaign Money

By NICHOLAS CONFESSORE

Big donors, leaders of political parties and candidates with access to wealthy supporters will be the biggest beneficiaries of the Supreme Court decision issued on Wednesday, a ruling that could fundamentally reshape the political terrain in the 2014 elections and beyond.

Election experts predicted a surge of new money into congressional campaigns and political parties, expanding the world of high-dollar fund-raising now dominated by "super PACs" and big-spending political nonprofit groups.

The decision effectively eradicates a significant campaign finance restriction brought about in the aftermath of the Watergate scandal, the cap on the total amount any one person can give to federal candidates and parties in any two-year election cycle.

"The Supreme Court ruling will dramatically increase the importance of major donors in federal elections," said Robert K. Kelner, a Republican election lawyer.

Two groups in particular stand to be most empowered by Wednesday's decision: Those with the wherewithal to spend millions of dollars on campaign contributions and those with access to them, including party leaders, senior lawmakers and presidents.

Donors would still be barred from giving more than $5,200 to any one candidate over the course of the 2014 campaign. But the new ruling would allow each donor to contribute that amount to as many candidates as he or she wants, freeing those with the means to pour millions of dollars into candidates and parties.

Current rules limit each donor to a total of $74,600 worth of contributions to party committees and political action committees, and $48,600 to all federal candidates, enough to permit a donor to make the maximum $5,200 in contributions to as many as nine candidates. But when the Supreme Court decision goes into effect, a single donor will be able to contribute the maximum amount to every candidate in the country, every political action committee, and every party committee, campaign experts say.

The ruling opens the door for each party's establishment to reclaim some power from the super PACs and other independent spending groups that are now playing an outsize role in campaigns. Experts said the decision would permit party leaders to form joint fund-raising committees and solicit multimillion dollar checks on behalf of candidates. The House minority leader, Nancy Pelosi, for example, could in theory approach a donor seeking to help Democrats win control of the House of Representatives, and solicit as much as $2.3 million -- $5,200 for each Democratic candidate in every House race, plus a contribution to the Democratic Congressional Campaign Committee.

A donor could also, in theory, give $5,000 per year to every political action committee currently registered with the Federal Election Committee. That would total more than $13 million, versus the $74,600 allowed under the existing aggregate cap.

Party officials have been effectively prohibited from soliciting supersize checks since Congress moved in 2002 to ban unlimited contributions to party committees, also known as "soft money." The prestige and financial muscle of party leaders was further eroded by the court's Citizens United decision [1] in 2010, which led to super PACs, which could raise and spend unlimited amounts of money so long as they did not coordinate with parties or candidates. Super PACs have spent more than $700 million since that decision.

But the ruling offers a path for party officials to re-establish themselves as kingmakers. And because senior congressional leaders often have the closest ties to big donors, the decision could give them a tool with which to discipline rank-and-file members.

The decision will go into effect in a matter of weeks, though it could be months before the Federal Election Commission drafts new rules to conform to it.

Supporters of the decision said that it could bring about more transparency to campaign fund-raising, since the new money would flow into entities, like political parties, which are required to disclose their donors. Political nonprofit groups, for example, face no such requirement.

Reince Priebus, the chairman of the Republican National Committee, which joined the lawsuit with Shaun McCutcheon, an Alabama businessman, said, "Today's court decision in McCutcheon v. F.E.C. is an important first step toward restoring the voice of candidates and party committees and a vindication for all those who support robust, transparent political discourse."

Critics of the decision said it would erode one of the few remaining barriers to the influence of large donors. The court's 5-to-4 decision said that such concerns were not a sufficient basis to restrict campaign donations.

The decision is also likely to increase pressure on donors: No longer can they fend off elected officials seeking checks by claiming that they have already "maxed out" for the cycle.

"We hate it," said Manuel Ortiz, a lobbyist at Brownstein Hyatt Farber Schreck. "We were joking around with the partners today: Guess my kids are going to community college. There is going to be no end in sight. Campaigns now will take as much as you will give."

The decision also undermines rules in about a dozen states that cap aggregate contributions from a single donor, setting up potential challenges for those seeking to overturn the rules. New York State forbids individuals to contribute more than $150,000 in a calendar year to political candidates and committees.

How many donors will seek to fully exploit the McCutcheon ruling is difficult to predict. The existing cap was poorly enforced by the Federal Election Commission: During the 2012 election, according to a study [2] by the Sunlight Foundation, as many as 600 donors appeared to exceed the aggregate contribution cap, most of them Republican donors.

The cap was instituted in 1974, as part of the law that first established limits on the contributions to candidates and parties. The goal was to prevent a donor from circumventing the new contribution limits by giving money to a candidate through a network of other organizations, like parties or political action committees.

But Chief Justice John Roberts wrote that such situations were "either illegal under current campaign finance laws or divorced from reality."

Advocates of tighter regulation said they believed the ruling opened the door to circumvention schemes. Indeed, President Obama and Mitt Romney used joint fund-raising arrangements under the existing cap, which allowed them to raise money for state parties and funnel that cash into other electoral battlegrounds, with the candidates benefiting from the spending.

"It's complicated, but I will tell you this," said Fred Wertheimer, the president of Democracy 21, which seeks tighter restrictions on campaign fund-raising, "anything that can be done, will be done. That's the history of these issues."

Eric Lipton and Thomas Kaplan contributed reporting.

[1] http://www.nytimes.com/2010/01/22/us/politics/22scotus.html

[2] http://sunlightfoundation.com/blog/2013/05/13/top-hard-money-donors/